AI Stocks: In case you missed Nvidia, Google’s AI news

Chip maker nvidia (NVDA) Artificial intelligence was in the spotlight this week with a soaring outlook that had Wall Street analysts dazzled. For investors moving into AI stocks, NVDA stock valuation is moving to the fore due to fears of an AI bubble.


In other developments, Google Fr the alphabet (GOOGL) said it is in talks with European regulators about a voluntary agreement to create sandboxes for artificial intelligence. Also, at the Google Marketing Live event, the internet search giant revealed more of its advertising strategy amid the rise of ChatGPT from Open AI.

Meanwhile, a cyber security company Palo Alto Networks (PANW) reported fiscal third-quarter earnings that beat estimates. The department discussed its view of how generative AI can change cybersecurity. Here’s a link to a transcript of the PANW earnings call.

Since AI models require big data to train software algorithms, Palo Alto may be well positioned with its cloud platform.

How long will Nvidia dominate AI chips?

But it was Nvidia that stood out among AI stocks with its sky-high expectations. Nvidia expected first-quarter revenue of $11 billion, nearly $4 billion ahead of analyst estimates, driven by strong demand for artificial intelligence in its data center business.

there is more. Microsoft, OpenAI’s largest investor, is developing closer ties with Nvidia. Also, the two companies are building a new AI-powered supercomputer.

NVDA stock analysts said Amazon Web Services, the cloud computing arm of (AMZN), it appears to be a client for the new Nvidia AI chipset. AWS has been a big buyer of Intel chips (INTC).

Nvidia’s outlook has raised questions about what Intel and advanced micro devices (AMD) can do to take advantage of the boom in demand for artificial intelligence chips in data centers.

Who might challenge Nvidia among AI stocks?

In the long term, Nvidia may face stiffer competition. Chip buyers have always wanted a second source of semiconductors. They don’t want to rely on a single chip maker and give that company more pricing leverage. Also, customers want variety in the event of supply chain issues. For example, Microsoft recently also signed an AI development deal with AMD.

Meanwhile, the cloud computing giants as well as parent Facebook Meta platforms (META) are all developing custom AI chips in-house for hyperscale data centers. In April, Google announced a new AI supercomputer using custom silicon and said it was faster than Nvidia’s systems.

At Goldman Sachs, analyst Toshiya Hari says that at the moment Nvidia is the king of the hill in AI chips. It will take time for AI startups to scale.

“While we recognize emerging competition from major Cloud Service Providers (CSPs) and other computing semiconductor vendors, we envision Nvidia maintaining its position as the industry benchmark for the foreseeable future given its competitive moat and customer urgency to develop/deploy increasingly complex AI models,” he said in a note. for clients.

AI shares: The battle for cybersecurity

Elsewhere, a software maker C3. ai (AI) announces its earnings on May 31st. With shares up 152% in 2023, that’s part of the buzz in AI stocks.

What is also clear is that a major battle looms between hackers and cybersecurity companies.

Cyber ​​security company CrowdStrike Holdings (CRWD) reports earnings on May 31. It’s also among the AI ​​stocks to watch.

In other AI news, startup Anthropic announced on May 23 that it had raised $450 million in a funding round led by Spark Capital. Google, sales force (CRM), Sound Ventures, and Zoom for visual communications (ZM) in finance.

Follow Reinhardt Krause on Twitter @tweet For updates on 5G wireless networks, artificial intelligence, cybersecurity, and cloud computing.

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